EU Eyes Capping Banks’ Crypto Holdings


EU banks exposed to cryptocurrencies could see caps and big capital requirements from a new financial services law as lawmakers look to curb risk from the digital coins, a document from the European Parliament said.

The plan was reportedly tabled by Green Party lawmaker Ville Niinistö and want to get ahead of capital norms being consulted on by the Basel Committee on Banking Supervision.

The document noted that bitcoin or other crypto assets are considered “unduly volatile” and would be flagged as needing much more caution, meaning they’d be unable to lend based on their virtual asset holdings.

Meanwhile, Stronghold Digital Mining has reached an agreement with lender New York Digital Investment Group (NYDIG) and WhiteHawk Capital to cut out about half its debt, a Bloomberg report said.

The deal would also add liquidity and the company plans to restructure a convertible note.

Stronghold will return around 26,200 bitcoin mining machines to NYDIG. That will eliminate all of the $67.4 million outstanding debt from an original agreement.

Bitcoin miners have been having problems raising capital and repaying loans because of the fall of crypto prices since November’s all-time highs.

Finally, a JPMorgan analyst thinks Coinbase is going to benefit from the Merge, with clients getting value from staking ether, Coindesk wrote.

The Merge refers to the upcoming switch from proof-of-work to the proof-of-stake model for Ethereum, which is purported to help with the carbon footprint for the network.

The analyst, Kenneth Worthington, said Coinbase has around a 15% stake in Ethereum assets, more than its 7% share of the overall crypto ecosystem.

JPMorgan also estimated that Coinbase could generate an incremental annual staking revenue of $650 million from the Merge — with ETH at $2,000 and a 5% yield.

This also came as the exchange recently began offering ethereum staking for institutional clients.

Worthington said the market share for Coinbase is likely slanted in favor of institutions, which are more likely to own ethereum and bitcoin. Retail customers, on the other hand, would likely tend toward speculative tokens.

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